Aqualisa is a U.K. based shower manufacturing Company. The Company has been very reputed in the U.K. market for its top quality showers, reliability and great service. It had launched its premium brand Quartz in May 2001. The basic purpose behind launching this brand was to address the concerns of the consumers and the plumbers which perhaps were not satisfied with the existing products in the market.
Aqualisa has three products in shower market segments. This product addresses the issues of lower water pressure and allowing for proper temperature control for water. Generally speaking, due to legacy building designs, shower has low pressure and variable temperatures. Electric Showers commands around 60% of the market (Aqua has 20% or so of electric shower market) and easier to install but are positioned awkwardly in bathrooms and does not solve the pressure problem.
On flip side, they do not need separate heat water supply, rather heats the water by itself. Also they are by far the cheapest among the three products with price difference in the range of 200- 400 dollars. Mixer Shower – Has two products one with pump one without. Priced at 400- 700.It takes 2 days to install. They have Great reputation in the market. Power Share – Awkwardly installed. they in 480 to 700 price range. It has average quality reputation. The quartz shower solves the awkward installation and long installation time problems. It can be installed in half a day, has easily configurable buttons to set temperature, and the installed box can be tucked away in a closed space.
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However, it costs 850 -1100 which is higher than the cost of other showers in the market and hence it is perceived as a premium segment product. Because of this and also the reluctance of the plumbers to learn about the new product, Quartz has not been able to achieve its expected sales. It was able to achieve the sales of only 15 units a day. Going with the current sales of Quartz shower of 15 units a day, the Company could probably recover the amount spent on its research and development with a time period of 3-4 years. If the Company could promote the sales of the product to at least 50 units a day it will be able to achieve a break even within the next two years.
Analysis
Porter’s five forces:
1)Supplier power: As seen in the case of Aqualisa, the supplier has almost no say. The market is completely customer driven. 2)Buyer power: In case of the shower industry, there are three customers. They are the plumbers, the property developers and the consumers. The plumbers here had the maximum bargaining power as they were involved in 73% of times in selecting a suitable shower. Only 17% of the times the consumers selected the shower alone without the consultation of the plumber. Hence the plumbers were the key customers. 3)Threat of new entry: The shower industry has been a growing industry. Only 60% of the U.K homes had showers and hence there were a lot of chances that new companies can come in the market to tap the huge market. This would reduce the market share of Aqualisa.
4)Threat Of substitution: Only 60 % of UK homes have a shower in spite of a bathtub being present in all homes. People are reluctant to buy showers because of the problems of fluctuations in water pressure and temperature. The aqualisa showers overcomes these problems however, if the perception about the showers are not changed in the minds of the people, the may still be reluctant and not use showers 5)Competitive rivalry: There are more than 9 rival brands to Aqualisa in the UK market. The market has been captured by Triton which captures about 30% of the UK shower market. However, Aqualisa has a superior technology which in still not available with any of the rival companies.
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Strengths:
1)Aqualisa was perceived as a high quality shower manufacturing company in UK.This was due to the superior products which Aqualisa used to sell. 2)They had very high innovation in technology. The Quartz was an example of high technological innovation of Aqualisa which was not present in any other shower making company. 3)The brand image of Aqualisa was very good because of its high quality and innovations. 4)The market share of Aqualisa was also quite high in the UK market. It captured 18% of the total market share and was third largest selling brand in UK.
Weakness:
1)Aqualisa was perceived as an expensive brand. As a result of which the sales were less in the lower segments of the market. 2)The service of Aqualisa though perceived as high quality was actually degrading and about 10% of the products had defects in them. 3)Because of the high R&D cost involved in bringing innovative product in the market, the products were highly priced.
Opportunities:
1)With a strong R&D already present in Aqualisa, the company could innovate further and bring out technologically advanced low cost, low weight and a highly reliable product. 2)With its shower having very less fluctuations in water pressure and temperature, the products could have very high demand in the UK market if marketed properly.
Threats:
1)The main customers for the showers were the plumbers as the end consumer were very heavily dependent on the plumbers. Most of the times, the choice of the consumer was influenced by the plumber. However, the plumbers were usually reluctant to use a new product as they were used to working with the existing product and did not want to learn anything new. This could lead to very low sales of the newly launched Aqualisa Quartz showers. 2)Aqualisa was clear differentiator from the market because of its superior technology and innovations. But the rival companies were also soon catching up and within two years’ time could match up with Aqualisa’s superior products.
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The 4 P’s of marketing:
Product:
The current quartz products of Aqualisa ,quartz Standard and Quartz Pumped can be produced to capture the Premium end market . In addition to that a we propose to produce a cut down quartz product named say ShowerMax Lite that could be marketed under the ShowerMax brand to cater to the need from the developers. Similarly a slightly differentiate quartz shower product Say Quartz Easy and Quartz Easy pumped could be introduced under the brand name Gainborough to fulfill the needs of the DO-IT-Yourself
Customer group Place:
The Aqualisa quartz products such as Quartz Standard and Quartz Pumped should be marketed should be marketed only through Showroom and Trade shops to maintain its status as premium brand. The quartz product under the Shower Max Brand (ShowerMax lite) should be sold only through Specialist Contract oulets to supply developers. Quartz Easy marketed under the brand Gainborough should be sold through DIY sheds.
Price:
The Aqualisa is a premium brand so we keep the price as Planned but we have to sell Shower Max quartz product at much lower price since the developers are price sensitive and we have to slightly decrease to promote it among DYI group.
